Have you ever tried explaining to non-economists what the consequences of resource misallocation can be for the economy?

What will happen if you invest enough in some sectors and too little in others? The answer is likely to be that you have enough production in sectors where you got your investments right and too little in the under-invested sectors. That may be correct in some cases, but it ignores the interdependence between the adequately invested and underinvested sectors. As a result, you may have too little production in the sectors where you have invested enough because you have too little production in the sectors you have neglected to invest.

This question was asked ---- out of surprise, confusion, and even a little bit of suspicion --- at the launch of JIYO! --- an artisan owned brand ---- at the New Delhi Office during April 1-3. The crowds of artists, art patrons, buyers, hotel chain owners, parliamentarians, diplomats, Bank staff, and other shoppers milled about the kiosks of artists from rural areas, and many contemplated this. The answer is quite simple: from a rural poverty reduction perspective. India is home to the largest population of rural poor in the world, larger even than all of sub-Saharan Africa.

Cultural industries are the second largest employer in rural India. Cultural industries are also a US$100 billion global market. It's clear what the Bank could and should do in this area. Linking rural artists to this massive global market creates opportunities for both growth and poverty reduction, and it comes with the bonus of preserving the India's rich cultural heritage.

When people think of rural development, they mostly think of agriculture, but there is so much more to "rural" than people assume. Many of the traditional, heritage art forms --- also known as cultural industries --- have been kept alive in rural areas. Too often relegated as "quaint", these artists have been relegated to the informal sector, a poverty trap that leads many to abandon their art. JIYO! --- a JSDF-funded project in India that is linked to several rural livelihoods investment projects --- has been turning the typical view of rural arts upside down.

You’ve seen those tourism ads: Incredible India. Since I first arrived in this country a month back, it’s been nothing short of incredible. India can fascinate and overwhelm you at the same time. It is incredible in many ways: its size, its development challenges, its diversity, and its rich cultural heritage.

Luckily for me, I have had the good fortune to experience the latter. India’s cultural heritage dates back thousands of years. And India has managed to preserve it while many others have failed. You don’t need to go deep into the hinterland to experience it. A drive through Delhi alone will take you through several phases of its history. And a four-hour drive out of the capital to Agra will take you back 400 years to the Mughal Empire. Everything is well preserved. And everyone seems to be passionate about preserving this heritage, as evident in the JIYO Exhibition that I’ve just attended.

In 2000, 192 countries and 23 international organizations agreed to work towards fulfilling the eight Millennium Development Goals (MDGs)by 2015. Although progress has been uneven between regions and much remains to be done, global poverty rates have been reduced from 52% of the world’s population living under $1.25 a day in 1981 to 26% in 2008.

Bangladesh has been quite successful through taking a multifaceted approach into achieving these goals. Initiatives such as Notun Jibon which means “New Life” in Bengali not only have emphasized community driven development but also stresses the role of women in education and the community decision making process. The country has already achieved gender parity in primary and secondary schooling and is on track to meet the majority of the MDG’s such as halving infant and maternal mortality rates by 2015.

I moved to Bangladesh 3 years ago with a lot of excitement as I considered it a sort of mini-laboratory for development theory and practice.

My task was to oversee the Bangladesh portfolio from a social perspective. From day one, there was one issue that came up in almost all projects: land acquisition and resettlement. Once can expect this, given high population densities in a small country. Surprisingly, while there is a lot of debate about shortages of power and electricity for Bangladesh development, little attention is paid to the land issue. But all infrastructure has a footprint and access to land is complex.

This huge challenge was matched by a dearth of professionals to manage social risks. While the market for such services is growing, there was no institution to train people in those disciplines in the country. I could have continued to hire foreign consultants, but that didn’t seem very smart in the long run. So I thought: “let’s establish a course in a local university that would create that capacity over time and train a cadre of professionals capable of conducting a serious social impact assessment, carry out a good consultation process or design a solid resettlement action plan”. My intention was to fill a systemic gap. That could only happen over time, and it could only happen via local institutions.

Climate change is real and likely to drive increasingly dramatic changes in our environment. While ecosystems and disease dispersion may be affected, some of the greatest impacts are anticipated due to increases of extreme climate events such as droughts, floods and storms. We are already seeing these changes but often do not connect them with our lives. The question arises, “should communities wait for our governments to plan, address, and find resources to respond to risks of climate change?" I believe not. Much can be done in small ways through local actions. Keeping this in mind, the Civil Society Fund in Sri Lanka is focusing on “Development and Climate Change – Building Community Resilience in the Dry Zone of Sri Lanka”.

When thinking about development, I always look for opportunities for cross learning between regions. Having lived in and traveled extensively in East Asia and having worked in the South Asia Region for over a year, I often compare and think about prospects between the two regions. One question in particular is whether South Asia should aim to emulate East Asia’s manufacturing and export driven development model. Japan began using this model starting in the 1950’s and most East Asian countries particularly, South Korea, Malaysia, Taiwan, and most recently China have used manufacturing as a catalyst for growth.

According to the World Development Indicators, manufacturing accounted for over 30% of GDP in East Asia and Pacific while it is around 15% in South Asia. Bangladesh’s ready-made garment (RMG’s) industry is one example of manufacturing success as it has proven to be exceptionally competitive in the global market. However, holistically, I found that South Asia has distinctive characteristics and quickly moving towards an East Asian export-led model may not be most effective.

The theme for this year’s World Bank Civil Society Fund grant competition is, “Development and Climate Change – Building Community Resilience in the Dry Zone of Sri Lanka”While specifying guidelines for the Fund, we encourage applicants to develop proposals based on their creativity. CSF supports activities that empower and enable citizens to take initiatives to influence development outcomes.

Feizal Samath’s recent article,“Children in the Coastal Town of Kalmunai.” gives a snapshot of Gender issues and Climate Change in the dry zone of Sri Lanka. The article captures the burden on women caused by water shortages, health issues due to lack of clean water, and also the need to include women in policy planning.

In a speech made by World Bank Country Director for Sri Lanka and the Maldives, Naoko Ishii on International Women’s Day 2010, the issue of Gender Equity in the Sri Lankan context was highlighted “Sri Lanka is the best performer in South Asia, when we look at indicators such as by how long women live, how educated they are and if they have a decent standard of living. However, when we measure if women in Sri Lanka have exercised those capacities in economic and political life, the picture looks very different.”

The Bangladesh Local Governance Support Project (LGSP) was initiated in 2005 when local leaders voiced their demand for discretionary funds among others to serve their constituencies at a meeting. Union Parishad (UP) is the lowest tier of rural local government has a history over 170 years and held regular elections, however, UPs never received direct funding.

Funds were previously allocated by line ministries at the Upazila (sub-district) level for certain activities; neither the local government (UP) nor local people had a say on their own development priorities. The UP act of 1983 designated 38 mandates on the UP, but made no fund provision for carrying out those mandates. The average population of an UP was about 35,000 and UPs are the closest service delivery institutes to citizens. In 1998, an UP amendment ensured direct election of women in three seats.

While the Minister of Local Government was supportive of the project, most of the national political leaders (ministers, members of parliament) and bureaucrats were against autonomous local governments. Nationwide consultations were organized between local leaders and communities, supported by civil society, for mobilizing a united voice of local needs and incorporating these in the project design. It was a challenging time with episodes of violence.

Even so, the chances of the researchers accurately predicting the events that came to pass over the subsequent 20 years, including their impact on the 19th century’s world order, would have been infinitesimal. No one could have anticipated that Napoleon would have plunged Europe into non-stop war for a decade until being overcome at Waterloo, or that, by the time of his defeat, he would already have swept away the foundations of traditional structures and initiated an unstoppable wave of reforms.

Because of its industrial might, this Europe would dominate the rest of the world during the 19th century. When European rivalries exploded into World War One, the face of the earth had already changed considerably compared to the previous century. And, having changed the world, Europe set the conditions for the demise of its own empire. Even before World War One, Teddy Roosevelt had heralded the start of the United States’ ascension to its current hegemony.